Storage Deluxe pays $14.6M to NexPoint Storage for 70% stake in storage project in East Williamsburg

Storage Deluxe through the entity Bogart Partners LLC acquired a 70 percent stake valued at $14.6 million from NexPoint Storage Partners through the entity JCAP Bogart Storage LLC for the 160,000-square-foot storage development project at 74 Bogart Street in East Williamsburg, Brooklyn.
The deal closed on July 20, 2021 and was recorded on July 12, 2022. The property has zero square feet of built space and 160,000 square feet of additional air rights for a total buildable of 160,000 square feet according to PincusCo analysis of city data. The sale price per buildable square foot is $90 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The seller bought the property on May 8, 2019, for $45.5 million. This is an entity-level sale of a 70% stake in the storage building, not a deed transfer. Storage Deluxe is located at the same location as the buyer LLC.  NexPoint Advisors acquired Jernigan Capital, also known as JCAP, in 2020. Jernigan invested in storage facilities.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Storage Deluxe purchased one property in one transaction for a total of $20 million and sold 11 properties in nine transactions for a total of $511.1 million over the past 24 months.
The seller NexPoint Storage Partners had not purchased any other properties and had not sold any properties over the same time period.

The property

The 74 Bogart Street parcel has frontage of 200 feet and is 400 feet deep with a total lot size of 80,000 square feet. The zoning is M1-2 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $2.8 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received six DOB violations, $20,850 in ECB penalties, and $21,600 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 160,000-square-foot S-1 building. The project was developed by Chris Lynch with plans filed December 6, 2019 and permitted April 5, 2021.

The neighborhood

In East Williamsburg, the majority, or 62 percent of the 16.6 million square feet of commercial built space are industrial buildings, with residential walkup buildings next occupying 10 percent of the space. In sales, East Williamsburg has 1.4 times the average sales volume among other neighborhoods with $459 million in sales volume in the last two years and is the 9th highest in Brooklyn. For development, East Williamsburg has 1.4 times the average amount of major developments relative to other neighborhoods and is the 14th highest in Brooklyn. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

There is one active new building construction project totaling 160,000 square feet. It is a 160,000-square-foot S-1 building developed by Chris Lynch with plans filed December 6, 2019 and permitted April 5, 2021.

all properties are development.

The buyer

The PincusCo database currently indicates that Storage Deluxe owned at least one commercial property in New York City with 53,550 square feet and a city-determined market value of $2.8 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single P6 property. It is located in Queens.

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